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457(b) A Pension Plan?

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I am trying to determine two things:

 

First, is a 457(b) a pension plan in that it is a venue through which employees defer comepnsation to use post employment? In other words, can it be considered a pension plan in the most ###### sense of the phrase?

 

Second, the bwise FAQ on 457(b)s states, "Private plans — Non-governmental tax-exempt entity plans.

 

ERISA generally requires that a private retirement plan providing benefits to employees be funded by a trust or annuity contract. The rules, however, require that private 457(b) plans be unfunded in order to obtain tax benefits. Therefore, a plan will violate ERISA unless an exception applies. If a tax-exempt employer limits participation to a select group of management or highly compensated employees (or "top hat" group) then it is exempt from most ERISA requirements."

 

From what ERISA requirements are private - tax-exempt 457(b) plans NOT exempt?

 

 

 

I am trying to determine two things:

 

First, is a 457(b) a pension plan in that it is a venue through which employees defer comepnsation to use post employment? In other words, can it be considered a pension plan in the most ###### sense of the phrase?

 

Second, the bwise FAQ on 457(b)s states, "Private plans — Non-governmental tax-exempt entity plans.

 

ERISA generally requires that a private retirement plan providing benefits to employees be funded by a trust or annuity contract. The rules, however, require that private 457(b) plans be unfunded in order to obtain tax benefits. Therefore, a plan will violate ERISA unless an exception applies. If a tax-exempt employer limits participation to a select group of management or highly compensated employees (or "top hat" group) then it is exempt from most ERISA requirements."

 

From what ERISA requirements are private - tax-exempt 457(b) plans NOT exempt?

 

 

 

test

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Joy,

 

Before we can help you, you need to make a bigger picture of what you want from us.

First question: are you an employee or a plan administrator for an employer? Sounds like the latter.

Second question: what do you want to do with the 457?

Third question: whats preventing you from doing what you want?

 

Steve

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I am trying to determine two things:

 

First, is a 457(b) a pension plan in that it is a venue through which employees defer comepnsation to use post employment? In other words, can it be considered a pension plan in the most ###### sense of the phrase?

 

Second, the bwise FAQ on 457(b)s states, "Private plans — Non-governmental tax-exempt entity plans.

 

ERISA generally requires that a private retirement plan providing benefits to employees be funded by a trust or annuity contract. The rules, however, require that private 457(b) plans be unfunded in order to obtain tax benefits. Therefore, a plan will violate ERISA unless an exception applies. If a tax-exempt employer limits participation to a select group of management or highly compensated employees (or "top hat" group) then it is exempt from most ERISA requirements."

 

From what ERISA requirements are private - tax-exempt 457(b) plans NOT exempt?

 

 

 

I am trying to determine two things:

 

First, is a 457(b) a pension plan in that it is a venue through which employees defer comepnsation to use post employment? In other words, can it be considered a pension plan in the most ###### sense of the phrase?

 

Second, the bwise FAQ on 457(b)s states, "Private plans — Non-governmental tax-exempt entity plans.

 

ERISA generally requires that a private retirement plan providing benefits to employees be funded by a trust or annuity contract. The rules, however, require that private 457(b) plans be unfunded in order to obtain tax benefits. Therefore, a plan will violate ERISA unless an exception applies. If a tax-exempt employer limits participation to a select group of management or highly compensated employees (or "top hat" group) then it is exempt from most ERISA requirements."

 

From what ERISA requirements are private - tax-exempt 457(b) plans NOT exempt?

 

 

 

test

 

 

1. 457b plans for NP are deferred compensation plans in which employees can defer up to 15,500 per year on a pre tax basis. Deferrals are in addition to amounts deferred under a 403b or 401k plan. Employees can select the investments. However only highly compensated employees or members of a select group of management (the top hat group) can participate in the plan. Distributions are subject to the same distributions rules as IRAs.

 

There is one important difference in NP 457b plan in that the amounts deferred are considered to be assets of the employer and subject to the claims of the employer's creditors which could result in the loss of the employees benefits if the employer becomes involvent.

 

2. If the plan is limited to the top hat group and meets other requirements it is exempt from all requirements of ERISA except the provisions regarding the filing of claims by participants.

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Guest Sierra

 

I am trying to determine two things:

 

First, is a 457(b) a pension plan in that it is a venue through which employees defer comepnsation to use post employment? In other words, can it be considered a pension plan in the most ###### sense of the phrase?

 

Second, the bwise FAQ on 457(b)s states, "Private plans — Non-governmental tax-exempt entity plans.

 

ERISA generally requires that a private retirement plan providing benefits to employees be funded by a trust or annuity contract. The rules, however, require that private 457(b) plans be unfunded in order to obtain tax benefits. Therefore, a plan will violate ERISA unless an exception applies. If a tax-exempt employer limits participation to a select group of management or highly compensated employees (or "top hat" group) then it is exempt from most ERISA requirements."

 

From what ERISA requirements are private - tax-exempt 457(b) plans NOT exempt?

 

 

 

I am trying to determine two things:

 

First, is a 457(b) a pension plan in that it is a venue through which employees defer comepnsation to use post employment? In other words, can it be considered a pension plan in the most ###### sense of the phrase?

 

Second, the bwise FAQ on 457(b)s states, "Private plans — Non-governmental tax-exempt entity plans.

 

ERISA generally requires that a private retirement plan providing benefits to employees be funded by a trust or annuity contract. The rules, however, require that private 457(b) plans be unfunded in order to obtain tax benefits. Therefore, a plan will violate ERISA unless an exception applies. If a tax-exempt employer limits participation to a select group of management or highly compensated employees (or "top hat" group) then it is exempt from most ERISA requirements."

 

From what ERISA requirements are private - tax-exempt 457(b) plans NOT exempt?

 

 

 

test

 

 

1. 457b plans for NP are deferred compensation plans in which employees can defer up to 15,500 per year on a pre tax basis. Deferrals are in addition to amounts deferred under a 403b or 401k plan. Employees can select the investments. However only highly compensated employees or members of a select group of management (the top hat group) can participate in the plan. Distributions are subject to the same distributions rules as IRAs.

 

There is one important difference in NP 457b plan in that the amounts deferred are considered to be assets of the employer and subject to the claims of the employer's creditors which could result in the loss of the employees benefits if the employer becomes involvent.

 

2. If the plan is limited to the top hat group and meets other requirements it is exempt from all requirements of ERISA except the provisions regarding the filing of claims by participants.

 

================================================================

 

Once again Intruder insists on going off topic. The topic starter asks: "From what ERISA requirements are private - tax-exempt 457(b) plans NOT exempt"?

 

Intruder's answer includes a topic that is totally extraneous to the poster's question. Example: "Distributions are subject to the same distributions rules as IRAs." This assertion would be just annoying if it was simply accurate. But it is untenable because it is damn WRONG!!

 

 

Having said that,

 

1. An IRA owner may make withdrawals at will. Employment status and age is IRRELEVANT. EMPLOYER INVOLVEMENT IS NOT REQUIRED! There are no distribution triggering events that must be satisfied. THIS IS WHY THE IRA IS SO SUPER POPULAR!! Withdrawals made prior to age 59-1/2 are subject to an additional tax of 10 percent.

 

2. Withdrawals from a 457(b) plan for non-profits: Distribution is only allowed for certain events.

(1) at a specific date or according to a fixed schedule specified at the time of the initial deferral election, or (2) after separation from service, with a required 6 month delay for key employees at public companies, or (3) after disability, or (4) after death, or (5) after unforeseeable emergency

(based on a very strict definition that excludes tuition and home purchase, and which

requires that no other resources are reasonably available), or (6) after a change in

majority ownership or effective control of a corporation.

 

 

Joel L. Frank

Pension Columnist

The Chief-Civil Service Leader

277 Broadway

New York, NY 10007

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Guest Sierra

 

 

I am trying to determine two things:

 

First, is a 457(b) a pension plan in that it is a venue through which employees defer comepnsation to use post employment? In other words, can it be considered a pension plan in the most ###### sense of the phrase?

 

Second, the bwise FAQ on 457(b)s states, "Private plans — Non-governmental tax-exempt entity plans.

 

ERISA generally requires that a private retirement plan providing benefits to employees be funded by a trust or annuity contract. The rules, however, require that private 457(b) plans be unfunded in order to obtain tax benefits. Therefore, a plan will violate ERISA unless an exception applies. If a tax-exempt employer limits participation to a select group of management or highly compensated employees (or "top hat" group) then it is exempt from most ERISA requirements."

 

From what ERISA requirements are private - tax-exempt 457(b) plans NOT exempt?

 

 

 

I am trying to determine two things:

 

First, is a 457(b) a pension plan in that it is a venue through which employees defer comepnsation to use post employment? In other words, can it be considered a pension plan in the most ###### sense of the phrase?

 

Second, the bwise FAQ on 457(b)s states, "Private plans — Non-governmental tax-exempt entity plans.

 

ERISA generally requires that a private retirement plan providing benefits to employees be funded by a trust or annuity contract. The rules, however, require that private 457(b) plans be unfunded in order to obtain tax benefits. Therefore, a plan will violate ERISA unless an exception applies. If a tax-exempt employer limits participation to a select group of management or highly compensated employees (or "top hat" group) then it is exempt from most ERISA requirements."

 

From what ERISA requirements are private - tax-exempt 457(b) plans NOT exempt?

 

 

 

test

 

 

1. 457b plans for NP are deferred compensation plans in which employees can defer up to 15,500 per year on a pre tax basis. Deferrals are in addition to amounts deferred under a 403b or 401k plan. Employees can select the investments. However only highly compensated employees or members of a select group of management (the top hat group) can participate in the plan. Distributions are subject to the same distributions rules as IRAs.

 

There is one important difference in NP 457b plan in that the amounts deferred are considered to be assets of the employer and subject to the claims of the employer's creditors which could result in the loss of the employees benefits if the employer becomes involvent.

 

2. If the plan is limited to the top hat group and meets other requirements it is exempt from all requirements of ERISA except the provisions regarding the filing of claims by participants.

 

================================================================

 

Once again Intruder insists on going off topic. The topic starter asks: "From what ERISA requirements are private - tax-exempt 457(b) plans NOT exempt"?

 

Intruder's answer includes a topic that is totally extraneous to the poster's question. Example: "Distributions are subject to the same distributions rules as IRAs." This assertion would be just annoying if it was simply accurate. But it is untenable because it is damn WRONG!!

 

 

Having said that,

 

1. An IRA owner may make withdrawals at will. Employment status and age is IRRELEVANT. EMPLOYER INVOLVEMENT IS NOT REQUIRED! There are no distribution triggering events that must be satisfied. THIS IS WHY THE IRA IS SO SUPER POPULAR!! Withdrawals made prior to age 59-1/2 are subject to an additional tax of 10 percent.

 

2. Withdrawals from a 457(b) plan for non-profits: Distribution is only allowed for certain events.

(1) at a specific date or according to a fixed schedule specified at the time of the initial deferral election, or (2) after separation from service, with a required 6 month delay for key employees at public companies, or (3) after disability, or (4) after death, or (5) after unforeseeable emergency

(based on a very strict definition that excludes tuition and home purchase, and which

requires that no other resources are reasonably available), or (6) after a change in

majority ownership or effective control of a corporation.

 

 

Joel L. Frank

Pension Columnist

The Chief-Civil Service Leader

277 Broadway

New York, NY 10007

 

 

Intruder:

 

You attempt to confuse us all by intentionally going off topic with your answers, or parts thereof, and then when your answer, or parts thereof, is proven definitively wrong you intentionally hide out. You are one sick puppy and I suggest you address your emotional ills by posting up on a psychological website.

 

Why is it that you simply cannot admit publicly that you had it all wrong? Why is it that you simply cannot thank me for correcting you?

 

YOU DESERVE PROFESSIONAL ANSWERS TO THESE HIGHLY PERSONAL QUESTIONS...GO FOR THEM!

 

I personally wish you only the best!

 

Peace and Hope,

Joel L. Frank

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Sierra stated

 

 

 

Once again Intruder insists on going off topic. The topic starter asks: "From what ERISA requirements are private - tax-exempt 457(b) plans NOT exempt"?

 

In the previous post, Intruder stated

 

 

 

2. If the plan is limited to the top hat group and meets other requirements, it is exempt from all requirements of ERISA
except the provisions regarding the filing of claims by participants.
(emphasis added)

 

Thus, the answer to the question, as intruder indicates in #2 above, is the benefits claim requirement. This means that a 457(b) plans sponsored by a tax-exempt entity is NOT exempt from the benefit claims requirement. That is the only section of ERISA that applies.

 

Sierra's comment is thrown in above just for fun. Enjoy!

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Guest Sierra

John:

 

Joy's question had absolutley no relationship to the distribution rules for her non-profit 457(b) let alone for IRAs. Your intentional ommission of that portion of Intruder's answer dealing with distribution rules proves that point. Thank you for the assist.

 

For your personal edification, here once again, is what Intruder posted and my reply:

 

"1. 457b plans for NP are deferred compensation plans in which employees can defer up to 15,500 per year on a pre tax basis. Deferrals are in addition to amounts deferred under a 403b or 401k plan. Employees can select the investments. However only highly compensated employees or members of a select group of management (the top hat group) can participate in the plan. Distributions are subject to the same distributions rules as IRAs."

 

====================================================================

 

Once again Intruder insists on going off topic. The topic starter asks: "From what ERISA requirements are private - tax-exempt 457(b) plans NOT exempt"?

 

Intruder's answer includes a topic that is totally extraneous to the poster's question. Example: "Distributions are subject to the same distributions rules as IRAs." This assertion would be just annoying if it was simply accurate. But it is untenable because it is damn WRONG!!

 

 

Having said that,

 

1. An IRA owner may make withdrawals at will. Employment status and age is IRRELEVANT. EMPLOYER INVOLVEMENT IS NOT REQUIRED! There are no distribution triggering events that must be satisfied. THIS IS WHY THE IRA IS SO SUPER POPULAR!! Withdrawals made prior to age 59-1/2 are subject to an additional tax of 10 percent.

 

2. Withdrawals from a 457(b) plan for non-profits: Distribution is only allowed for certain events.

(1) at a specific date or according to a fixed schedule specified at the time of the initial deferral election, or (2) after separation from service, with a required 6 month delay for key employees at public companies, or (3) after disability, or (4) after death, or (5) after unforeseeable emergency

(based on a very strict definition that excludes tuition and home purchase, and which

requires that no other resources are reasonably available), or (6) after a change in

majority ownership or effective control of a corporation.

 

 

Joel L. Frank

Pension Columnist

The Chief-Civil Service Leader

277 Broadway

New York, NY 10007

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Sierra stated

 

 

 

Once again Intruder insists on going off topic. The topic starter asks: "From what ERISA requirements are private - tax-exempt 457(b) plans NOT exempt"?

 

In the previous post, Intruder stated

 

 

 

2. If the plan is limited to the top hat group and meets other requirements, it is exempt from all requirements of ERISA
except the provisions regarding the filing of claims by participants.
(emphasis added)

 

Thus, the answer to the question, as intruder indicates in #2 above, is the benefits claim requirement. This means that a 457(b) plans sponsored by a tax-exempt entity is NOT exempt from the benefit claims requirement. That is the only section of ERISA that applies.

 

Sierra's comment is thrown in above just for fun. Enjoy!

 

 

John:

 

Thanks for your enlightened comment. I dont think anything can be done to prevent Joel's redundent rants for attention.

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Guest Sierra

Intruder:

 

What am I, chop liver? Why can't you see your way clear to thank me for proving to you that your assertion that the distribution rules for a non-profit 457(b) are the same as an IRA is wrong?

 

 

 

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Guest Skeptical

Joel,

 

"Enlightened" comments are those that are offered by "IntRUDEr" or that agree with his view. Don't fall for the trap, and just ignore him/her. Only frustration and irritation is to be gained by addressing him'her directly.

 

Jim

 

 

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You know, there's a cool feature in this forum's software that when you click on someone's name (next to one of their posts) you can add them to your "ignore" list. Perhaps that may help?

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Guest Sierra

Joel,

 

"Enlightened" comments are those that are offered by "IntRUDEr" or that agree with his view. Don't fall for the trap, and just ignore him/her. Only frustration and irritation is to be gained by addressing him'her directly.

 

Jim

 

 

Hi Jim,

 

Additionally, I am astonished that John Feldt would purposefully dismiss and totally ignore the very essence of my post---the fact that part of "intruder's" answer was not only off topic but categorically wrong. Surely he could have agreed with me and at the same time assert that only part of "intruder's" response to Joy was correct. But for reasons known only to John he decided to be intentionally selective by posting only that part of 'intruder's' answer that is correct while ignoring the part that was totally wrong. What a despicable example of yellow journalism.

 

Having said that, psychologically, intruder first had to have John's fraudulent reply posted before he got the courage to post his usual off-topic reply! Simply, the mindset of a coward!

 

Like you have said, an intruder by definition is rude!

 

Peace and Hope,

Joel

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Wow, the cool ignore feature does work - I can barely hear the muffled sounds now!

 

Okay, back to the original post:

 

 

First, is a 457(b) a pension plan in that it is a venue through which employees defer compensation to use post employment? In other words, can it be considered a pension plan in the most ______ sense of the phrase?

I think using "pension plan" as a common layman's term to indicate a venue or vehicle by which retirement benefits or assets are accumulated to be used post-employment is okay to use for a basic understanding. However, the words "pension plan" can and have a much deeper meaning with additional requirements attached to it, so I think a pension person might shy away from using exactly that terminology when discussing a 457(b) plan.

 

 

Second, the bwise FAQ on 457(b)s states, "Private plans — Non-governmental tax-exempt entity plans.

 

 

ERISA generally requires that a private retirement plan providing benefits to employees be funded by a trust or annuity contract. The rules, however, require that private 457(b) plans be unfunded in order to obtain tax benefits. Therefore, a plan will violate ERISA unless an exception applies. If a tax-exempt employer limits participation to a select group of management or highly compensated employees (or "top hat" group) then it is exempt from most ERISA requirements."

 

From what ERISA requirements are private - tax-exempt 457(b) plans NOT exempt?

This question has been answered (it's the benefits claim section of ERISA that they are not exempt from).

 

I hope this answers your two questions!

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Guest Sierra

Wow, the cool ignore feature does work - I can barely hear the muffled sounds now!

 

Okay, back to the original post:

 

 

First, is a 457(b) a pension plan in that it is a venue through which employees defer compensation to use post employment? In other words, can it be considered a pension plan in the most ______ sense of the phrase?

I think using "pension plan" as a common layman's term to indicate a venue or vehicle by which retirement benefits or assets are accumulated to be used post-employment is okay to use for a basic understanding. However, the words "pension plan" can and have a much deeper meaning with additional requirements attached to it, so I think a pension person might shy away from using exactly that terminology when discussing a 457(b) plan.

 

 

Second, the bwise FAQ on 457(b)s states, "Private plans — Non-governmental tax-exempt entity plans.

 

 

ERISA generally requires that a private retirement plan providing benefits to employees be funded by a trust or annuity contract. The rules, however, require that private 457(b) plans be unfunded in order to obtain tax benefits. Therefore, a plan will violate ERISA unless an exception applies. If a tax-exempt employer limits participation to a select group of management or highly compensated employees (or "top hat" group) then it is exempt from most ERISA requirements."

 

From what ERISA requirements are private - tax-exempt 457(b) plans NOT exempt?

This question has been answered (it's the benefits claim section of ERISA that they are not exempt from).

 

I hope this answers your two questions!

 

 

John,

 

Thank you for giving intruder an example of just how easy it is to stay on topic!

 

Having said that, why do you continue to refuse to address that part of intruder's answer to Joy that asserts that the distribution rules for non-profit 457(b) are the same as IRAs?

 

John: Will you join me in requesting that intruder delete that single sentence from his answer to Joy?

 

Peace and Hope,

Joel L. Frank

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Wow, the cool ignore feature does work - I can barely hear the muffled sounds now!

 

Okay, back to the original post:

 

 

First, is a 457(b) a pension plan in that it is a venue through which employees defer compensation to use post employment? In other words, can it be considered a pension plan in the most ______ sense of the phrase?

I think using "pension plan" as a common layman's term to indicate a venue or vehicle by which retirement benefits or assets are accumulated to be used post-employment is okay to use for a basic understanding. However, the words "pension plan" can and have a much deeper meaning with additional requirements attached to it, so I think a pension person might shy away from using exactly that terminology when discussing a 457(b) plan.

 

 

Second, the bwise FAQ on 457(b)s states, "Private plans — Non-governmental tax-exempt entity plans.

 

 

ERISA generally requires that a private retirement plan providing benefits to employees be funded by a trust or annuity contract. The rules, however, require that private 457(b) plans be unfunded in order to obtain tax benefits. Therefore, a plan will violate ERISA unless an exception applies. If a tax-exempt employer limits participation to a select group of management or highly compensated employees (or "top hat" group) then it is exempt from most ERISA requirements."

 

From what ERISA requirements are private - tax-exempt 457(b) plans NOT exempt?

This question has been answered (it's the benefits claim section of ERISA that they are not exempt from).

 

I hope this answers your two questions!

 

 

John,

 

Thank you for giving intruder an example of just how easy it is to stay on topic!

 

Having said that, why do you continue to refuse to address that part of intruder's answer to Joy that asserts that the distribution rules for non-profit 457(b) are the same as IRAs?

 

John: Will you join me in requesting that intruder delete that single sentence from his answer to Joy?

 

Peace and Hope,

Joel L. Frank

 

 

Joel

 

I described 457b plans as being subject to the distribution rules for IRAs under IRC 401(a)(9) to differentiate the payment rules under 457b plans from the rules for non qualified deferred comp plans of profit making employers under IRC 409A which are not subject to the distribution rules under IRC 401(a)(9), even though some plans subject to IRC 409A are also subject to ERISA.

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